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Money no longer the only driving force

Financial systems are not so much an accident waiting to happen,” says Martin Wolf, the chief economic commentator for the Financial Times, “as one that is constantly happening.”

Since the collapse in 1973 of Bretton Woods, the system set up to regulate world financial markets since WWII, there have been 69 banking crises and 87 currency crises, according to Charles Lead-beater, a Charles Handy think tanker who, at age 40, epitomises the future: the knowledge worker.

Leadbeater, in his book Living on Thin Air: the new economy, (Viking, 1999) writes that we are no longer living in the 20th century world controlled only by finance capitalism but, in fact, also have two other driving forces: knowledge capitalism, and social capitalism.

Finance capitalism is the well known force creating fear and loath-ing in our little hearts as we witness the deregulated interconnected global financial market power focus-ed purely on the pursuit of shareholder profit.

Financial capitalism now seems out of control as confirmed by the Asian crisis, crashing commodity prices and dangerously unstable currencies.

The second force driving the new world economy according to Lead-beater – knowledge capitalism – is equally powerful, although less fam-iliar to the traditional Victorian (both age and state, ahem) business mind.

Knowledge capitalism is the drive to generate new ideas which can be rapidly commercialised into marketable products and services.

We now pay more for the intellectual smarts that go into the product than the value of its raw materials.

The steel in the latest American luxury cars costs A$1500 – the electronics cost A$4000.

Computer technology changes so quickly that it seems the use-by date expires before you get it plugged in – yet the new equipment still uses the same plastic, copper, gold, silicon and so on.

Increased power and performance comes from human intelligence – the basis of knowledge capitalism and new economic advantage.

Knowledge capitalism is pushing applied research faster than ever before, with previously unknown products and industries about to burst forth.

This is especially true at the interface of living organisms and technology such as nanorobots, microchip implanted microbes, biogenetically manipulated diseases and brain drugs aimed at emotions.

Knowledge products often outstrip our understanding of the full consequences or potential outcomes of use. Scary? Britain last week banned ethics-committee-approved research into cloning human foetus because of insufficient knowledge of potential consequences.

Modern economies, says Lead-beater, are now merely a system for distributing intelligence.

The third driving force is the least recognised but most important to a healthy sustainable world – social capitalism.

Social capital means people working together with trust, sufficiently shared values and shared goals to collaborate effectively for economic advancement and stability.

We have not really grasped this concept. We still throw away, says Leadbeater, through poverty, unemployment, poor education and family breakdown at least a third of our most precious asset: people brainpower, intelligence and creativity.

Ironically, this waste is increasing just when the world most needs it to get us out of our financial capitalism life threatening crisis.

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